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Today at a glance:
📦 PDD: Growth Pivot
📱 Xiaomi: Memory Crunch
🛵 Meituan: The Subsidy War
🛳️ Carnival: Energy Volatility
🐶 Chewy: Loyalty Flywheel
1. 📦 PDD: Growth Pivot
Temu parent PDD Holdings capped off FY25 with Q4 revenue rising grew 12% Y/Y to $17.7 billion ($0.4 billion miss), an acceleration from the single-digit growth seen earlier in the year.
The core story is Temu’s stabilization. After struggling with the end of the US de minimis tax exemption, the global bargain app regained momentum during the holiday season and now operates in nearly 100 markets. Transaction services revenue (which includes Temu) surged 19% to $9.1 billion in Q4, suggesting that PDD is successfully navigating the new tariff landscape by diversifying into Europe and optimizing its supply chain.
While growth improved, net income slid 11% to $3.5 billion ($0.52 EPADS miss). The company continued its aggressive campaign of “deliberate sacrifice” to fortify its ecosystem. Margins compress slightly for another quarter.
Strategic Reinvestment
Management has launched a massive three-year strategy aimed at “building another Pinduoduo” by shifting focus from raw traffic to deep supply-chain integration.
Support program: PDD is pouring resources into merchant support and last-mile logistics, including a new “free delivery to villages” pilot that establishes warehouses in remote rural areas to unlock untapped consumption.
Regulatory headwinds: The quarter was not without friction. Beijing authorities deepened their probe into PDD’s accounting and tax practices following a highly publicized literal fistfight between employees and regulators in December.
Supply chain conviction: Co-CEO Jiazhen Zhao emphasized that 2026 marks a new decade for the firm, with an “all-in” mindset on supply chain investment that will continue to pressure short-term margins.
Outlook & Geopolitics
Despite the earnings miss, the stock jumped post-earnings as investors cheered the revenue acceleration and easing trade tensions. The US Supreme Court’s recent ruling against certain 2025 tariffs and the potential creation of a “US-China Board of Trade” have provided a much-needed reprieve for cross-border e-commerce.
PDD’s balance sheet remains a fortress, with cash and short-term investments climbing to ~$60 billion. Management continues to warn that quarterly profits will fluctuate as they prioritize merchant retention over short-term earnings.